Netflix-Comcast Deal May Mark the End of Net Neutrality

Netflix has agreed to pay the nation’s largest cable company so its customers can enjoy faster downloads of movies and television shows. The deal, which could spawn others with Internet Service Providers (ISPs), could also redefine how content moves across the Internet and end the era of “net neutrality,” in which all users no matter their size or financial resources enjoyed the same level of online access.

Comcast, the No. 1 cable company that stands to get bigger if its merger with No. 2 Time Warner Cable goes through, will receive an undisclosed amount of money from Netflix under the deal that has generated significant buzz in the industry and among Internet regulators.

“For the first time in the cable industry’s history, a content provider will pay for direct access to the pipe [the Internet],” Kannan Venkateshwar, a Citi analyst, told clients, according to Agence France-Presse (AFP). “This flips the traditional distribution model thus far whereby content has been paid by the pipe.”

The Netflix-Comcast agreement is precisely what net-neutrality advocates wanted to avoid, fearing it will create a new online environment in which those with the largest checkbooks will be allowed to buy more bandwidth access.

The Federal Communications Commission (FCC) adopted a series of regulations that sought to ensure net neutrality. But a federal court tossed out many of the FCC’s rules, opening the way for Netflix—described by industry analysts as a bandwidth hog—to negotiate special arrangements with Comcast and others.

In addition to the announced deal, Netflix is reportedly talking to Verizon and AT&T to increase download speeds for customers, which undoubtedly would involve special financial arrangements between the video streaming giant and the two communications behemoths.

Netflix is responsible for nearly a third of all downloading in North America. Its popularity has also resulted in downstream slowdowns and complaints from customers, which is why Netflix is willing to pay Comcast and its competitors for greater access.

But these deals worry consumer advocates like John Bergmayer at Public Knowledge.

“Because the large residential ISPs themselves are the ones keeping the terms of their deals secret, it raises the question of whether they have something to hide,” he told AFP.